With consumers borrowing to buy everything from cars to cell phones, India’s household debt is estimated to have risen to 15.7% of GDP in March 2018 in 2012-13, the ratio was just 11.7%. With more credit history at their disposal, both banks and non-banking financial companies (NBFCs) have been pushing through loans more easily. The attitudinal shift towards spending, coupled with the EMI culture will keep consumption spends intact even when interest rates rise. What’s interesting is that the average ticket size of loans is falling suggesting an increasing inclusiveness. The decline is attributed to the change in the loan-mix towards short duration consumer loans like credit cards, personal loans and consumer durable loans. Housing credit is expected to grow 18% in the current year with homes becoming more affordable, especially for first time buyers, thanks to incentives provided by government. However, delinquencies for HFCs (housing finance companies) are expected to remain range-bound between 1.2% -1.5% At 15.7% of GDP, household debt in India is fairly low by Emerging Market standards for which the average is 39%.

(Financial Express)